As we approach the upcoming holiday season you can expect to start receiving solicitations from charitable organizations. I often get questions as to how to know a “good” charity from a “bad” one. Over the last few years both the Internal Revenue Service and MS Secretary of State have taken significant steps to get registration and financial information on charitable organizations to the general public.
I would encourage donors to go to the following websites and check out your charity before writing a check on blind faith.
Internal Revenue Service Resources:
The IRS websites give donors access to the federal registry of approved and recognized charitable organizations. This website should be a starting point for conducting your due diligence to see if the targeted charitable organization has been following the government’s rules.
MS Secretary of State Resource:
The Secretary of State’s website will provide a donor access to a vast database of MS registered charities which will allow a donor to evaluate a charity’s true operating effectiveness. Each year the Secretary of State’s office publishes an annual financial report on the revenues and expenses of each registered charity. A careful review of this annual report can provide a donor with a wealth of information as to what each charity does with its money. As a rule of thumb, if a charity is not using at least 70% of its money for program services, a donor may want to consider selecting a more effective charity. Please note that small charities and certain fund-raising events are exempt from registration with the State of MS.
Everyone wants their hard-earned money to go to a good place. Take a little time to make sure that the good guys are getting your money.